King Haakon I of Norway (Haakon the Good) maintained his residence at Fitjar. The Battle of Fitjar took place in Fitjar at Stord during 961 between the forces of King Haakon I and the sons of his half-brother, Eric Bloodaxe. Traditionally, important shipping routes have passed through the area, and the municipality contains several trading posts dating as far back as 1648. Fitjar was separated from Stord in 1860. There have been discussions about a possible reunion of the two municipalities, but no decision has been made.
The municipality (originally the parish) is named after the old farm Fitjar, since the first church was built there. The name is the plural form of fit which means "vigorous meadow". Before 1900 the name was written "Fitje".The coat-of-arms were granted in the late 1940s. The arms show a Viking helmet. The helmet and the color are derived from the belief that King Håkon the Good wore a golden helmet at the Battle of Fitjar in 961.